Mandatory Accounting Standards (Ind AS)-1

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |30| interdependent and cannot be offered in isolation. The airport premises is being used both for providing regulated services (Aeronautical services) and for providing non-regulated services (Non-aeronautical services). Based on DIAL and GHIAL’s proportion of regulated and non-regulated activities, the management has determined that over the concession period, the unregulated business activities drive the economics of the arrangement and contributes substantially to the profits of DIAL and GHIAL and accordingly, the management has concluded that SCA does not apply in its entirety to DIAL and GHIAL. 28 Disclosure pursuant of Ind AS 11 Construction contracts are as under (` in crore) Particulars March 31, 2017 March 31, 2016 April 01, 2015 a) Contract revenue recognised during the year 18.24 23.35 10.17 b) Disclosure for Contract in Progress (i) Aggregate amount of contract costs incurred up to date 6.37 3.51 5.82 (ii) Recognised Profit (Less recognised losses) 11.87 19.84 4.35 (iii) Customer advances outstanding – – – (iv) Retention money due from customers – 0.30 2.87 c) Amount due from customers 8.94 15.75 – d) Amount due to customers 0.59 – – 3. GVK POWER AND INFRASTRUCTURE LIMITED ACCOUNTING POLICY Service Concession Agreements 54. Service concession arrangement All the below service concession arrangements have been accounted under intangible asset model i) GVKDKEPL Description of the arrangement Significant terms of the arrangement GVKDKEPL has entered into a Concession Agreement with National Highway Authority of India (NHAI) on May 17,2010 pursuant whereto, the NHAI has awarded to the GVKDKEPL the project of four laning of Deoli-Kota Section of National Highway No. 12 (NH -12) from Km 165.00 to Junction of NH –76 on Kota Period of concession: January 5, 2011 to January 05, 2037 (Including 2.5 year construction period) Remuneration GVKDKEPL has received the right to charge users a fee for using the toll road, which the GVKDKEPL will collect and retain till the end of the concession period. Investment grant from concession grantor Nil Bypass (approximately 83.04 Km) in the State of Rajasthan on Build, Operate and Transfer (BOT) basis, on design, build, finance, operate and transfer (DBFOT) Pattern under NHDP Phase III. Infrastructure return at the end of concession period Yes Investment and renewal obligations No renewal option to the GVKDKEPL Re-pricing dates : Yearly reset of toll rates Basis upon which re-pricing or renegotiation is determined Inflation Premium payable to grantor : Rs 4,860 increasing by an additional 5% as compared to the immediately preceding previous year. During the year, GVKDKEPL has recorded revenue of ` 7,764, consisting of ` 1,362 on construction and Rs 6,401 on operation of the toll road. The revenue recognised in relation to construction represents the fair value of the construction services provided in constructing the toll road.

|31| Chap. 5 – Ind AS 11 — Construction Contracts ii) GVKBVEPL Description of the arrangement Significant terms of the arrangement GVKBVEPL has entered into a Concession Agreement with Gujarat State Road Development Corporation Limited (GSRDC), a Government of Gujarat undertaking on February 21, 2011 pursuant whereto, GSRDC has awarded to GVKBVEPL the project of six laning of Bagodara – Wataman – Tarapur - Vasad road on State Highway No. 8 from km.0/0 to km 101/9 in the state of Gujarat on Build, Operate and Transfer (BOT) basis. Period of concession: November 11, 2011 to November 11, 2038 Remuneration: GVKBVEPL has received the right to charge users a fee for using the toll road, which the GVKBVEPL will collect and retain till the end of the concession period. Investment grant from concession grantor Nil Infrastructure return at the end of concession period Yes Investment and renewal obligations No renewal option to the GVKBVEPL Re-pricing dates : Yearly reset of toll rates Basis upon which re-pricing or renegotiation is determined Inflation Premium payable to grantor : Fee equal to 15.0192% of the total Realisable fee during that year; and for each subsequent year of the concession period, the premium shall be determined by increasing the proportion of premium to the total Realisable fee in the respective year by an additional 1% as compared to the immediately preceding year. During the year, GVKBVEPL has recorded revenue of ` 39 on construction. The revenue recognised in relation to construction represents the fair value of the construction services provided in constructing the toll road. iii) GJEPL Description of the arrangement Significant terms of the arrangement GJEPL has entered into Concession Agreement dated 08th May 2002 with the National Highways Authority of India (“NHAI”) for construction and Operation of 6 Lane Highway of 90.385 KM between Jaipur and Kishangarh on Build-OperateTransfer (“BOT”) Period of concession: 20 years from the date of Financial Closure 17th March, 2003 Remuneration: GJEPL has received the right to charge users a fee for using the toll road, which the GJEPL will collect and retain till the end of the concession period. Investment grant from concession grantor ` 21,100 by way of equity support for meeting the total project cost Share of NHAI in Revenue As per clause 7.2 of the concession agreement the concessionaire shall share with NHAI, any Fees that it actually receives in any Accounting Year which are in excess of the projected Fees for the Accounting Year commencing from the year in which Commercial Operations Date (“COD”) shall occur, as set out in Schedule Y (the “Projected Fee”) for such Accounting Year (“Excess Fee” / “Share of NHAI in Revenue”). Infrastructure return at the end of concession period Yes Investment and renewal obligations No renewal option to the GJEPL

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |32| Description of the arrangement Significant terms of the arrangement Re-pricing dates : Yearly reset of toll rates Basis upon which re-pricing or renegotiation is determined Inflation During the year, GJEPL has recorded revenue of ` 30,196 on operation of the toll road. Notes to Accounts Non-Applicability of Service Concession Arrangement Accounting in MIAL Appendix A of Ind AS-11 “Service Concession Arrangements” applies to public-to-private service concession arrangements if certain conditions as provided in clause 5 are fulfilled namely that the Grantor Controls or Regulates What services the operator must provide, to whom and what prices. Further, the grantor must control through ownership, beneficial entitlement or otherwise any significant residual interest in Infrastructure at the end of Concession arrangement. Application Guidance on Appendix A clarifies applicability of Appendix A under AG7 sub-clause (b), where it provides for situations where the use of Infrastructure is partly regulated and partly unregulated. It states that for applying control test when purely ancillary activities are unregulated, the control test shall be applied as if those services did not exist MIAL business activities and operations are governed by Operations, Managements & Development Agreement (OMDA) under an initial Concession term effective from 3rd May, 2006 for 30 years which is extendable by another 30 years. The Management of Company has conducted a detailed analysis to determine the applicability of Ind AS in light of the following: • The Company uses a common infrastructure in generating both Aeronautical and Non-Aeronautical revenue and the Infrastructure assets are inseparable and not capable of operating Independently. • Aeronautical services are regulated while there is no control over determination of prices for nonaeronautical services. Charges of Non-Aeronautical services are determined at the sole discretion of MIAL and regulator does not decide and control the prices of non-aeronautical services. • The non-aeronautical revenue is not ancillary revenue and is significant to the overall revenue of MIAL. Hence the Management of MIAL has concluded that accounting as per Appendix A of Ind AS 11 “Service Concession Arrangement” is not applicable to MIAL. 4. HINDUSTAN CONSTRUCTION COMPANY LIMITED ACCOUNTING POLICY i. Accounting of Construction Contracts The Group follows the percentage completion method, based on the stage of completion at the Balance Sheet date, taking into account the contractual price and revision thereto by estimating total revenue including claims/variations as per Ind AS 11, Construction Contracts, and total cost till completion of the contract and the profit so determined proportionate to the percentage of the actual work done. Revenue is recognised as follows: - In case of item rate contracts on the basis of physical measurement of work actually completed, at the Balance Sheet date.

|33| Chap. 5 – Ind AS 11 — Construction Contracts - In case of Lump sum contracts, revenue is recognised on the completion of milestones as specified in the contract or as identified by the management. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration. Advance payments received from contractee for which no services are rendered are presented as ‘Advance from contractee’. ii. Accounting of Supply Contracts — Sale of Goods Revenue from supply contract is recognised when the substantial risk and rewards of ownership is transferred to the buyer, which is generally on dispatch, and the collectability is reasonably measured. Revenue from product sales are shown as net of all applicable taxes and discounts. iii. Accounting for Claims Claims are accounted as income in the period of receipt of arbitration award or acceptance by client or evidence of acceptance received. Interest awarded, being in the nature of additional compensation under the terms of the contract, is accounted as other operating revenue on receipt of favourable arbitration award. iv. Revenue from sale of land and FSI Income from sale of land (including on a long-term lease basis) is recognised on the transfer of all significant risks and rewards of ownership to the buyer and a reasonable expectation of collection of the sale consideration from the buyer exists. v. Revenue from sale of constructed units Revenue from sale of constructed units is recognised when the substantial risk and reward is transferred to the buyer, which is generally on execution of sale agreement, and the collectability is reasonably measured. vi. Revenue from Real Estate projects Revenue from Total and General Contracting (TC/GC) Long-term contracts for the construction of third-party real estate are accounted for using the percentage of completion (POC) method. The degree of completion is determined on the basis of the physical measurement of work performed on the construction site. The different executed activities of the project are measured based on available units in comparison to the total quantities needed for the completion (surveys of the work performed-method). With the application of the surveys of the work performed method, the difference between contract costs incurred and contract cost recognised (billed) is adjusted to the “cost incurred on GC/TC project” under unbilled/work in progress. Contract costs are recognized as an expense in the year in which they are incurred. Contracts and groups of contracts for which the degree of completion or the outcome cannot be reliably estimated are capitalized/ inventorised only to the extent of the amount of the contract costs that are likely to be recoverable. Anticipated losses from construction contracts are covered in full by valuation allowances. In accounting for contracts in progress, contractual revenue comprises the contractually agreed revenue and amendments/ variations and claims that have been confirmed by the customer or for which payment is considered highly probable. vii. Revenue from real estate development Revenue from the sale of real estate projects is recognised on the transfer of title or the transfer of material risks and rewards to the purchaser. Real estate investor projects are accounted for as construction contracts based on POC. Accordingly, revenue and the gains of development is recognised along the construction of the project. The separate sale of project development rights and plans is accounted for as sale and gains are realised at the time of the transfer of risks and rewards. Revenue from sale of real estate development projects with multiple buyers (i.e. condominium projects) is recognised if the POC is above 25%. Notes to accounts Note 35 Disclosure in accordance with Ind AS 11 ‘Construction contracts’ - Amount due from / to customers on Construction Contracts

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |34| As at 31 March 2017 As at 31 March 2016 ` crore ` crore Contract revenue for the year 3,699.52 3,686.50 Aggregate amount of cost incurred and recognized profits less recognized losses up to the reporting date on contract under progress 38,253.29 33,841.27 Advances received from contractees 1,708.91 1,165.30 Retention money 379.35 325.70 Gross amount due from customer for contract work (net of retention) 6,485.75 5,791.55 Gross amount due to customer for contract work - - 5. IL&FS TRANSPORTATION NETWORKS LIMITED (ITNL) ACCOUNTING POLICY Accounting for rights under service concession arrangements and revenue recognition i. Recognition and measurement The Group builds, operates and maintains infrastructure assets under public-to-private Service Concession Arrangements (“SCA’s”), which is an arrangement between the “grantor” (a public sector entity/authority) and the “operator” (a private sector entity) to provide services that give the public access to major economic and social facilities utilizing private-sector funds and expertise. The infrastructures accounted for by the Group as concessions are mainly related to the activities concerning roads, tunnels, check posts, railways and other infrastructure facilities. Concession contracts are public-private agreements for periods specified in the SCA’s including the construction, upgradation, restoration of infrastructure and future services associated with the operation and maintenance of assets in the concession period. Revenue recognition, as well as, the main characteristics of these contracts is detailed in Note B.9.iii. With respect to service concession arrangements, revenue and costs are allocated between those relating to construction services and those relating to operation & maintenance services, and are accounted for separately. Consideration received or receivable is allocated by reference to the relative fair value of services delivered when the amounts are separately identifiable. The infrastructures used in a concession are classified as an intangible asset or a financial asset, depending on the nature of the payment entitlements established in the concession agreement. When the amount of the arrangement consideration for the provision of public services is substantially fixed by a contract, the Group recognizes revenues from construction services for public facilities (infrastructures) by the percentage-of-completion method, and recognizes the consideration as a financial asset and the same is classified as “Receivables against Service Concession Arrangements”. The Group accounts for such financial assets at amortized cost, calculates interest income based on the effective interest method and recognizes it in revenue as Finance Income. When the demand risk to the extent that the Group has a right to charge the user of infrastructure facility, the Group recognizes revenues from construction services for public facilities (infrastructures) by the percentage-of-completion method, and recognizes the consideration for construction services at its fair value, as an intangible asset. The Group accounts for such intangible asset (along with the present value of committed payments towards concession arrangement to the grantor at the appointed date e.g. Negative Grant, premium etc.) in accordance with the provisions of Ind AS 38 and is amortized based on projected traffic count or revenue, as detailed in Note B.9.vi, taking into account the estimated period of commercial operation of infrastructure which generally coincides with the concession period. Intangible asset is capitalized when the project is complete in all respects and when the Group receives the final completion certification from the grantor as specified in the Concession Agreement and not on completion of component basis as the intended purpose and economics of the project is to have the complete length of the infrastructure available for use The component based certification which is received is an intermediate

|35| Chap. 5 – Ind AS 11 — Construction Contracts mechanism provided in the Concession Agreement to provide a right to collect eligible toll to compensate the Group for cost recovery during construction period and for any delays beyond the control of the Group. However, where there is other than temporary delay due to reasons beyond the control of the Group, the management may treat constructed portion of the infrastructure as a completed project. Eligible toll revenue collected on receipt of the component based certification is reduced from the cost of construction, as the construction work on remaining portion is still in progress and the entire asset is not ready for its intended purpose. When the concession arrangement has a contractual right to receive cash from the grantor specifically towards the concession arrangement and also the right to charge users for the public services, these are considered as two separate assets (components) – financial asset component based on the guaranteed amount and an intangible asset for the remainder. ii. Contractual obligation to restore the infrastructure to a specified level of serviceability The Group has contractual obligations to maintain the infrastructure to a specified level of serviceability or restore the infrastructure to a specified condition during the concession period and/or at the time of hand over to the grantor of the SCA. Such obligations are measured at the best estimate of the expenditure that would be required to settle the obligation at the balance sheet date. In case of concession arrangements under intangible asset model, the timing and amount of such cost are estimated and recognized on a discounted basis by charging costs to revenue on the units of usage method i.e. on the number of vehicles expected to use the project facility, over the period at the end of which the overlay is estimated to be carried out based on technical evaluation by independent experts. In case of concession arrangements under financial asset model, such costs are recognized in the period in which such costs are actually incurred. iii. Revenue recognition Once the infrastructure is in operation, the treatment of income is as follows: Finance income for concession arrangements under financial asset model is recognized using the effective interest method. Revenues from operations and maintenance services and overlay services are recognized in each period as and when services are rendered in accordance with Ind AS 18 Revenue. Revenue for concession arrangements under intangible asset model is recognized in the period of collection of toll which generally coincides with the usage of public service or where from such rights have been auctioned, in the period to which auctioned amount relates. iv. Revenue from construction contracts The Group recognizes and measures revenue, costs and margin for providing construction services during the period of construction of the infrastructure in accordance with Ind AS 11 ‘Construction Contracts’. When the outcome of a construction contract can be estimated reliably and it is probable that it will be profitable, contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses respectively by reference to the percentage of completion of the contract activity at the reporting date. The percentage of completion of a contract is determined considering the proportion that contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. For the purposes of recognizing revenue, contract revenue comprises the initial amount of revenue agreed in the contract, the variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. The percentage of completion method is applied on a cumulative basis in each accounting period to the current estimates of contract revenue and contract costs. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate and the effect of which are recognized in the Consolidated Statement of Profit and Loss in the period in which the change is made and in subsequent periods. When the outcome of a construction contract cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred of which recovery is probable and the related contract costs are recognized as an expense in the period in which they are incurred.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |36| When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense in the consolidated statement of profit and loss in the period in which such probability occurs. v. Borrowing cost related to SCA’s In case of concession arrangement under financial asset model, borrowing costs attributable to construction of the infrastructure are charged to consolidated statement of Profit and Loss in the period in which such costs are incurred. In case of concession arrangement under intangible asset model, borrowing costs attributable to the construction of infrastructure assets are capitalized up to the date of the final completion certificate of the asset/facility received from the authority for its intended use specified in the Concession Agreement. All borrowing costs subsequent to the capitalization of the intangible assets are charged to the consolidated statement of profit and loss in the period in which such costs are incurred. vi. Amortization of intangible asset under SCA The intangible rights relating to infrastructure assets, which are recognized in the form of right to charge users of the infrastructure asset are amortized by taking proportionate of actual traffic count for the period over total projected traffic count from project to cost of intangible assets; i.e. proportionate of actual traffic for the period over total projected traffic count from the intangible assets expected to be earned over the balance concession period as estimated by the management. However, with respect to toll road assets constructed and in operation as at March 31, 2016, the amortization of such intangible rights are based on actual revenue earned compared to total projected revenue from the project over the balance concession period to cost intangible assets, instead of traffic count. Total projected revenue/traffic count is reviewed at the end of each financial year and is adjusted to reflect any changes in the estimates which lead to the actual collection at the end of the concession period. vii. Claims Claims raised with the concession granting authority towards reimbursement for costs incurred due to delay in handing over of unencumbered land to the [Project Special Purpose Vehicle (“SPVs”)] Group for construction or other delays attributable solely to the concession granting authority are recognized when there are is a reasonable certainty that there will be inflow of economic benefits to the [concerned Project SPVs] Group. The claims when recognized as such are reduced from the carrying amount of the intangible asset/financial asset under the service concession arrangement, as the case may be, to the extent the claims relate to costs earlier included as a part of the carrying amount of these assets. Further, these claims are credited to profit or loss to the extent they relate to costs earlier debited to profit or loss. The claims are presented separately as a financial asset. viii. Accounting of receivable and payable from/to the grantor a) Receivable towards the concession arrangement from the grantor When the arrangement has a contractual right to receive cash or other financial asset from the grantor specifically towards the concession arrangement (in the form of grants) during the construction period or otherwise, such a right, to the extent eligible, is recorded as financial asset in accordance with Ind AS 109 “Financial Instruments,” at amortized cost. The receivable so recognized will be adjusted against the related intangible asset (toll)/financial asset (annuity). b) Payable towards the concession arrangement to the grantor When the arrangement has a contractual obligation to pay cash or other financial asset to the grantor specifically towards the concession arrangement during the construction period or otherwise, such unconditional obligation to pay cash is recorded as a financial liability on the date when the obligation arises in accordance with Ind AS 109 “Financial Instruments,” at amortised cost, with a corresponding recognition of an intangible asset. (Refer Note 19) Thereafter, the interest expense is recognized based

|37| Chap. 5 – Ind AS 11 — Construction Contracts on the effective interest rate method, which also becomes eligible for capitalization on qualifying assets. Provision Onerous contracts Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Critical accounting judgments The preparation of Financial Statements in conformity with the recognition and measurement principles of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures of contingent liabilities at the date of the Financial Statements and the reported amounts of income and expenses for the periods presented. The matters to be disclosed will be dictated by the circumstances of the individual entity, and by the significance of judgements and estimates made to the performance and financial position of the entity. Instead of disclosing this information in a separate note, it may be more appropriate to include such disclosures in the relevant asset and Ind AS 112.7 requires entities to disclose information about significant judgements and assumptions they have made in determining (i) whether they have control of another entity, (ii) whether they have joint control of an arrangement or significant influence over another entity, and (iii) the type of joint arrangement when the arrangement has been structured through a separate vehicle. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected. Key sources of estimation of uncertainty Key source of estimation of uncertainty at the date of Financial Statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of— i. Revenue recognition – Margin on Intangible Assets The Company has recognised margin on intangible assets equivalent to the internal rate of return (“IRR”) generated by the asset. The IRR calculation considers components such as revenue from the asset, expenses to be incurred for generating the revenue and cost incurred/to be incurred for constructing the asset for its intended use. These components are estimated by the management considering assumptions such as (i) Work will be executed in the manner expected so that the project is completed timely (ii) consumption norms will remain same (iii) Assets will operate at the same level of productivity as determined (iv) Estimates for contingencies (v) There will be no change in design and the geological factors will be same as communicated and (vi) price escalations etc. There is some amount of complexity involved in estimating these components and these estimates are sensitive to changes in the underlying assumptions. All the estimates and assumptions are reviewed at each reporting date. ii. Traffic count/Revenue for amortisation of assets The Company has recognised the amortisation of intangible assets relating to Service Concession Agreements based on the estimated traffic count/estimated revenue over the project lifecycle. These estimates are corroborated through a traffic study report issued by an independent field expert. As the traffic study report is based on the various assumptions such as infrastructure development in the area, commercial developments, economic conditions, inflation, government policies etc., these are reviewed on an annual basis. iii. Cash Flow Model The Cash flow model indicates the cash flow to be generated over the project lifecycle. The key inputs of the model comprise of revenue inflows (Toll/annuity), expenses tobe incurred to earn the revenue, estimations on cost to build and maintain the asset, interest obligations based on financing pattern and

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |38| other operational efficiencies. These inputs are based on circumstances existing and management judgment/ assumption on the future expectations based on current situations. Judgments include management view on expected earnings in future years, changes in interest rates, cost inflation, government policy changes, etc. These input assumptions could affect the reported cash flow from the related assets/investments and accordingly these assumptions are reviewed periodically. Notes to Accounts 40. Disclosure in respect of Construction Contracts ` in Crore Particulars Year ended March 31, 2017 Year ended March 31, 2016 Contract revenue recognised as revenue during the year 108.45 70.51 ` in Crore Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Cumulative revenue recognised 1,485.34 1,376.89 1,306.38 Advances received 2.46 10.44 10.44 Retention Money receivable 41.57 39.29 39.29 Gross amount due from customers for contract work, disclosed as asset (i.e. Unbilled Revenue) 168.45 94.77 24.27 Gross amount due to customers for contract work, disclosed as liability (i.e. Unearned Revenue) - - - SFS ACCOUNTING POLICY Revenue recognition Revenue from construction contracts The Company recognizes and measures revenue, costs and margin for providing construction services during the period of construction of the infrastructure in accordance with Ind AS 11 ‘Construction Contracts’. When the outcome of a construction contract can be estimated reliably and it is probable that it will be profitable, contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses respectively by reference to the percentage of completion of the contract activity at the reporting date. The percentage of completion of a contract is determined considering the proportion that contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. For the purposes of recognizing revenue, contract revenue comprises the initial amount of revenue agreed in the contract, the variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. The percentage of completion method is applied on a cumulative basis in each accounting period to the current estimates of contract revenue and contract costs. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate and the effect of which are recognized in the Statement of Profit and Loss in the period in which the change is made and in subsequent periods. When the outcome of a construction contract cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred of which recovery is probable and the related contract costs are recognized as an expense in the period in which they are incurred.

|39| Chap. 5 – Ind AS 11 — Construction Contracts When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense in the Statement of Profit and Loss in the period in which such probability occurs. Any excess/short revenue recognized in accordance with the stage of completion of the project, in comparison to the amounts billed to the clients in accordance with the milestones completed as per the respective development agreements, is carried forward as “Unearned Revenue” or “Unbilled Revenue” as the case may be. Provision Onerous contracts Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Critical accounting judgments and key sources of estimation uncertainty Key estimations in relation to Construction revenue and cost The Company, being a part of construction industry major components of contract estimate are budgeted costs and revenue to complete the contract. While estimating these components various assumptions are considered by the management such as (i) Work will be executed in the manner expected so that the project is completed timely (ii) consumption norms will remain same (iii) Assets will operate at the same level of productivity as determined (iv) Wastage will not exceed the normal % as determined etc. (v) Estimates for contingencies (vi) There will be no change in design and the geological factors will be same as communicated and (vii) price escalations etc. Due to such complexities involved in the budgeting process, contract estimates are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Notes to Accounts 29 Disclosure in respect of Construction Contracts ` in Crore Particulars Year ended March 31, 2017 Year ended March 31, 2016 Contract revenue recognised as revenue during the year 2,991.00 3,648.21 ` in Crore Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Cumulative revenue recognised 17,709.43 14,718.43 11,070.22 Advances received 262.07 377.58 499.49 Retention Money receivable 300.17 181.31 140.29 Gross amount due from customers for contract work, disclosed as asset (i.e. Unbilled Revenue) 399.29 482.20 119.81 Gross amount due to customers for contract work, disclosed as liability (i.e. Unearned Revenue) 229.64 208.15 263.16

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |40| 6. PNC INFRATECH LIMITED ACCOUNTING POLICY Service Concession Arrangements The company constructs or upgrades infrastructure (construction or upgrade services) used to provide a public service and operates and maintains that infrastructure (operation services) for the specified period of time. Under Appendix A to Ind AS 11 – Service Concession Arrangements, these arrangements are accounted for based on the nature of the consideration. The intangible asset model is used to the extent that the Company receives a right (i.e. a franchisee) to charge users of the public service. The financial asset model is used when the company has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction service. When the unconditional right to receive cash covers only part of the service, the two models are combined to account separately for each component. The company manages concession arrangements which include constructing road, redevelopment and maintenance of industrial estate etc. for public use. These concession arrangements set out rights and obligations related to the infrastructure and the service to be provided. The right consideration gives rise to an intangible asset and financial receivable and accordingly, both the intangible assets and financial receivable models are applied. Income from the concession arrangements earned under the intangible asset model consists of the (i) fairvalue of contract revenue, which is deemed to be fair value of consideration transferred to acquire the asset; and (ii) payments actually received from the users. The intangible assets is amortized over its expected useful life in a way that reflects the pattern in which the asset’s economic benefits are consumed by the company, starting from the date when the right to operate starts to be used. Based on these principles, the intangible asset is amortized in line with the actual usage of the specific public facility, with a maximum of the duration of the concession. Financial receivable is recorded at a fair value of guaranteed residual value to be received at the end of the concession period. This receivable is subsequently measured at amortised cost. Any assets carried under concession arrangements are derecognised on disposal or when no future economic benefits are expected from its future use or disposal or when the contractual rights to the financial assets expire. In the case of Operation and Maintenance arrangements, Intangible asset is recognized at fair value of the concession fee payable over the arrangement period. Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow and the revenue can be reliably measured, irrespective of fact whether payment is received or not. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment. i. Construction Contracts Contract revenue is recognized under percentage of completion method. The Stage of Completion is determined on the basis of physical completion of work as acknowledged by the client. Revenue related claims are accounted in the year in which arbitration award is awarded/settled or accepted by customer or there is a tangible evidence of acceptance received. Other sales are accounted on dispatch of material and exclude applicable sales tax/VAT and are net of discount. Revenue from Joint Venture contract is accounted for net of joint venture share, under turnover, in these financial statements. Agency charges, if any, are accounted on receipt basis as other operating income. The income from Toll contracts on BOT/OMT basis are recognized on actual collection of toll revenue.

|41| Chap. 5 – Ind AS 11 — Construction Contracts Notes to accounts Note 42: Disclosure pursuant to Indian Accounting Standard-11 “Construction Contracts”. Amount (` Lacs) Particulars Year ended March 31, 2017 Year ended March 31, 2016 Total Contract revenue 1,67,596.24 1,99,206.44 Particulars about contracts in progress at the end of the period: Aggregate amount of cost incurred up to period end 1,47,539.89 1,79,645.92 Aggregate amount of profit / (Loss) Recognized 20,056.35 19,560.52 Advance Received 19,885.56 26,469.52 Retention Amount 19,890.05 8,305.76 Gross Amount due from customers for contract work - - Gross amount due to customers for contract work - - ll

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |42| Chapter 6 Ind AS 12 — Income Taxes 1. ADANI PORT LIMITED ACCOUNTING POLICY Taxes Tax expense comprises of current income tax and deferred tax. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current income tax (including Minimum Alternate Tax (MAT)) is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date. Current income tax relating to items recognized outside the statement of profit and loss is recognized outside the statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax Deferred tax is provided using the liability approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except - When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. - In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in jointly controlled entities, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized, except: - When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss - In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in jointly controlled entities, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

|43| Chap. 6 – Ind AS 12 — Income Taxes The Company is eligible and claiming tax deductions available under section 80IAB of the Income Tax Act, 1961 for a period of 10 years w.e.f. FY 2007-08. Some of the subsidiaries and jointly controlled entities are also eligible for tax deductions available under section 80IA of the Income Tax Act, 1961 for a period of 10 years out of eligible period of 15 years. In view of the Company and some of the subsidiaries and jointly controlled entities availing tax deduction under Section 80IA/80IAB of the Income Tax Act, 1961, deferred tax has been recognized in respect of temporary difference, which reverse after the tax holiday period in the year in which the temporary difference originate and no deferred tax (assets or liabilities) is recognized in respect of temporary difference which reverse during tax holiday period, to the extent such gross total income is subject to the deduction during the tax holiday period. For recognition of deferred tax, the temporary differences which originate first are considered to reverse first. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. The Group recognizes tax credits in the nature of Minimum Alternative Tax MAT credit as an asset only to the extent that there is sufficient taxable temporary difference/convincing evidence that the Group will pay normal income tax during the specified period, i.e., the period for which tax credit is allowed to be carried forward. In the year in which the Group recognizes tax credits as an asset, the said asset is created by way of tax credit to the consolidated statement of profit and loss. The Group reviews such tax credit asset at each reporting date and writes down the asset to the extent the Group does not have sufficient taxable temporary difference/convincing evidence that it will pay normal tax during the specified period. Deferred tax includes MAT tax credit. Significant accounting judgments, estimates and assumptions Taxes Deferred tax assets are recognised for unused tax credits to the extent that it is probable that taxable profit will be available against which the credits can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. 26 INCOME TAX The major component of income tax expenses for the year ended March 31, 2017 and March 31, 2016 are as under: i) Profit and Loss Section (` in crore) Particulars March 31, 2017 March 31, 2016 Current Income tax Current tax charges 881.59 729.96 Tax (credit) under Minimum Alternate tax (‘MAT’) (770.42) (613.60) Adjustment in respect of Current income tax of previous year 0.13 (0.27) Deferred Tax Relating to origination and reversal of temporary differences 175.33 166.72 Tax Expense reported in the Consolidated Statement of Profit and Loss 286.63 282.81 Other Comprehensive Income (‘OCI’) Section

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |44| Particulars March 31, 2017 March 31, 2016 Deferred tax related to items recognised in OCI during the year Net Loss /(Gain) on remeasurements of defined benefit plan 1.61 (1.17) Unrealised Loss/ (Gain) on FVTOCI Equity Securities 0.03 3.97 1.64 2.80 ii) Balance Sheet Section (` in crore) Particulars March 31, 2017 March 31, 2016 April 01, 2015 Provision for Income Tax (net of advance tax) 193.91 30.96 43.04 Tax Recoverable (net of provision) (refer note 8) 66.01 80.43 80.64 127.90 (49.47) (37.60) iii) Reconciliation of tax expenses and the accounting profit multiplied by India’s domestic tax rate for March 31, 2017 and March 31, 2016 Particulars March 31, 2017 March 31, 2016 % ` In Crore % ` In Crore Accounting profit before Income tax 4,178.87 3,119.44 At India’s Statutory income tax rate (34.608%) 34.61 1,446.22 34.61 1,079.58 Add /(Less) Adjustment in respect of current income tax of previous year i) Non Deductible Expenses 0.62 26.11 1.20 37.30 ii) Deduction u/s 80IA/80IAB (22.95) (959.10) (30.61) (954.97) iii) Recognition of credits for previous period tax losses (4.82) (201.55) (3.83) (119.59) iv) MAT credit recognised for earlier years (2.65) (110.88) - - v) MAT credit not recognised for earlier years - - 2.58 80.63 vi) Tax Credit on Unrealised Profit eliminated 0.02 0.66 (0.45) (14.15) vii) Deferred tax asset not recognised on unabsorbed depreciation / losses 1.34 55.86 4.85 151.19 viii) Others 0.70 29.31 0.73 22.82 Total (1,159.59) (796.77) Income tax reported in Statement of profit and Loss 6.86 286.63 9.07 282.81 iv) Deferred Tax Liability (net) (` in crore) Particulars Balance Sheet as at Statement of Profit and Loss March 31, 2017 March 31, 2016 April 1, 2015 March 31, 2017 March 31, 2016 (Liability) on Accelerated depreciation for tax purpose (1,750.91) (1,714.18) (1,473.33) (36.73) (240.85) Assets on unrealised exchange variation 18.12 44.43 208.63 (26.31) (164.20) Assets on Provision for Gratuity and Leave encashment 4.02 - - 4.02 - Assets / (Liability) on Reversal of 80IA period 116.74 149.97 130.91 (33.23) 19.06 Assets / (Liability) on other temporary differences 35.62 150.54 142.04 (114.92) 8.50 Assets on consolidation adjustments 171.95 147.89 83.34 24.06 64.55 Assets on account of unabsorbed losses/depreciation 363.55 341.72 135.40 21.83 206.32 Assets on account of bonus payable 0.01 - - 0.01 - Assets on Bond issue expenses amortization 13.71 - - 13.71 - Assets on Deposit Given and Taken (net) 2.65 2.02 1.32 0.63 0.70 (Liability) on Preference Share debt component (68.17) (70.57) (72.78) 2.40 2.21 Assets / (Liability) on Inter Corporate Deposit Fair valuation (8.01) 20.99 80.68 (29.00) (59.69) Assets / (Liability) on Deferred Government Grant 0.35 0.38 0.48 (0.03) (0.10) Assets on Interest Expenses 2.46 - - 2.46 -

|45| Chap. 6 – Ind AS 12 — Income Taxes (` in crore) Particulars Balance Sheet as at Statement of Profit and Loss March 31, 2017 March 31, 2016 April 1, 2015 March 31, 2017 March 31, 2016 (Liability) on Corporate /Bank Guarantee Amortization (7.01) (5.40) (2.56) (1.61) (2.84) Assets / (Liability) on remeasurement (gain)/loss on defined benefit plan (0.34) 0.73 (0.06) (1.07) 0.79 (Liability) on equity investment FVTOCI (24.81) (24.84) (20.87) 0.03 (3.97) (1,130.07) (956.32) (786.80) (173.75) (169.52) v) Deferred Tax Assets reflected in the Balance Sheet as follows (` in crore) (` in crore) Particulars March 31, 2017 March 31, 2016 April 1, 2015 Tax Credit Entitlement under MAT 2,905.92 2,157.84 1,544.24 Less : Deferred tax liabilities (net) (1,130.07) (956.32) (786.80) 1,775.85 1,201.52 757.44 vi) Reconciliation of Deferred tax liabilities (net) (` in crore) (` in crore) Particulars March 31, 2017 March 31, 2016 Tax income / (expenses) during the period recognised in Statement of Profit and Loss 175.33 166.72 Tax income / (expenses) during the period recongnised in OCI (1.58) 2.80 173.75 169.52 vii) The Company has been availing tax holiday benefit u/s. 80IAB of the Income Tax Act, 1961 on the taxable income. However, in view of the amendment in Income Tax Act, 1961 w.e.f. April 1, 2011 by Finance Act 2011, the Company is liable to pay Minimum Alternate Tax (MAT) on income from the financial year 2011-12. Based on the amendment, the Company has made provision of ` 704.24 crore (previous year ` 624.34 crore) for current taxation based on its book profit for the financial year 2016- 17 and has recognised MAT credit of ` 571.28 crore (previous year ` 607.82 crore) (read with note 38(u)) as the management believes, in view of strategic volumes of cargo available with the Company and higher depreciation charge for accounting purposes than the depreciation for income tax purposes in the future period, it is possible that the MAT credit will be utilized post tax holiday period w.e.f. financial year 2017-18. MAT credit of ` 199.13 crore (previous year ` 5.78 crore) has been recognised in subsidiary entities, Adani Logistics Limited, Adani Hospitals Mundra Private Limited, Adani Hazira Port Private Limited and The Dhamra Port Company Limited. viii) The Group has following unutilised MAT credit under the Income Tax Act, 1961 for which deferred tax assets has been recognised in the Balance Sheet at. Financial Year Amount (` in crore) Expiry Date 2011-12 250.94 2026-27 2012-13 366.96 2027-28 2013-14 450.19 2028-29 2014-15 483.45 2029-30 2015-16 694.94 2030-31 2016-17 659.44 2031-32 Total 2,905.92 ix) Certain subsidiary companies has carried forward unabsorbed depreciation aggregating ` 811.55 crores (previous year ` 704.71 crores and as at April 01, 2015 ` 573.59 crores) under the Income Tax Act, 1961 for which there is no expiry date of its tax credit utilisation by the respective entities. Further

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |46| certain subsidiary companies have carried forward losses aggregating ` 393.96 crore (previous year ` 716.44 crore and as at April 1, 2015 ` 530.64 crore) under the Income Tax Act, 1961, which gets expired within 8 years of the respective year. The carried forward losses will get expired mainly during the year 2020-21 to 2024-25 Deferred tax assets has not been recognised in respect of these unabsorbed losses as they may not be used to offset taxable profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other evidence of recoverability in the near future. If the Group were able to recognise all unrecognised deferred tax assets, the profit would increase by ` 280.86 crores. x) During the year ended March 31, 2016, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity. 2. APOLLO TYRES LIMITED ACCOUNTING POLICY Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. Current Tax Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable income tax laws of the country in which the respective entities in the group are incorporated. Taxable profit differs from ‘profit before tax’ as reported in the consolidated statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax Deferred tax is recognized on temporary differences between the carrying amount of assets and liabilities in the financial statements and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which the temporary differences can be utilised and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

|47| Chap. 6 – Ind AS 12 — Income Taxes The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Current and Deferred tax for the year Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. Notes to Ind AS 101 First time Adoption of Indian Accounting Standards reconciliation Under previous GAAP, Deferred tax asset was not recognised on business losses incurred by subsidiaries in the absence of virtual certainity of having future profits. As per Ind AS, Deferred tax asset can be recognised if it is probable that the current losses will be recovered with future profits, accordingly the deferred tax asset has been recognised on such losses. Other notes 11 INCOME TAXES i) Reconciliation between average effective tax rate and applicable tax rate Particulars Year ended March 31, 2017 Year ended March 31, 2016 ` Million Rate (%) ` Million Rate (%) Profit before tax 14,355.45 15,906.49 Income tax using the Company’s domestic tax rate 4,968.42 34.61% 5,505.61 34.61% Tax effect of Effect of different tax rates in foreign jurisdictions (352.80) (2.46%) (357.15) (2.25%) Non deductible expenses 97.91 0.68% 46.24 0.29% Tax exempt income (29.28) (0.20%) (92.97) (0.58%) Tax incentives and concessions (1,180.35) (8.22%) (506.68) (3.19%) Changes in recognised deductible temporary differences 33.60 0.23% 133.48 0.84% Others (172.04) (1.20%) (51.64) (0.32%) Income tax expense recognised in consolidated statement of profit and loss 3,365.46 23.44% 4,676.89 29.40% ii) Components of deferred tax liability (net) ` Million Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Tax effect of items constituting deferred tax liabilities Property, plant and equipments 7,764.92 7,064.30 6,216.19 Intangible assets 222.60 243.08 219.36 Employee benefits 15.32 3.69 – Others 286.13 148.07 102.46 Gross deferred tax liability (a) 8,288.97 7,459.14 6,538.01 Tax effect of items constituting deferred tax assets Employee benefits 125.22 123.42 116.47 Provisions for doubtful debt/advances 141.89 15.56 15.56

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |48| ` Million Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Others 360.72 308.32 295.50 Gross deferred tax asset (b) 627.83 447.30 427.53 Deferred tax liability (net) (a - b) 7,661.14 7,011.84 6,110.48 iii) Components of deferred tax asset (net) Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Tax effect of items constituting deferred tax liabilities Property, plant and equipments – – 144.94 Others – – 27.69 Gross deferred tax liability (a) – – 172.63 Tax effect of items constituting deferred tax assets Carry forward tax losses 339.17 426.95 217.05 Others 290.09 175.13 275.27 Gross deferred tax asset (b) 629.26 602.08 492.32 Deferred tax asset (net) (b-a) 629.26 602.08 319.69 (iv) Components of deferred tax expense Particulars Year ended March 31, 2017 Year ended March 31, 2016 Tax effect of items constituting deferred tax liabilities Property, plant and equipments 886.87 601.23 Intangible assets (0.52) 0.39 Employee benefits 6.95 1.12 Others 121.52 52.88 Sub-total (a) 1,014.82 655.62 Tax effect of items constituting deferred tax assets Employee benefits 20.02 12.85 Provisions for doubtful debt/advances 126.33 (0.07) Carry forward tax losses 28.44 261.31 Others 12.71 23.41 Sub-total (b) 187.50 297.50 Total (a - b) 827.32 358.12 3. BHARAT PETROLEUM CORPORATION LIMITED ACCOUNTING POLICY Taxes on Income Current Tax Income-tax Assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the end of reporting period.

|49| Chap. 6 – Ind AS 12 — Income Taxes Current Tax items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income or directly in equity. Deferred tax Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Deferred Tax items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax is not recognized for 1. Temporary differences related to investments in subsidiaries and joint ventures to the extent that Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. 2. Taxable temporary differences arising on initial recognition of goodwill. Note 27 Tax Expense & Deferred Tax Liabilities (Net) (Consolidated) (a) Amounts recognised in profit and loss (` in crore) Particulars 2016-17 2015-16 Current tax expense (A) Current year 3,168.28 3,418.45 Short/(Excess) provision of earlier years (111.24) 10.64 Deferred tax expense (B) Origination and reversal of temporary differences 1,135.60 613.63 Tax expense recognised in the income statement (A+B) 4,192.64 4,042.72

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |50| (b) Amounts recognised in other comprehensive income ` in Crores Particulars 2016-17 2015-16 Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans (83.46) 28.89 (54.57) (141.03) 48.80 (92.23) Equity instruments through Other Comprehensive income- net change in fair value 185.04 (1.93) 183.11 (180.37) (1.32) (181.69) Equity accounted investees - share of OCI (0.96) 0.30 (0.66) (0.17) - (0.17) Items that will be reclassified to profit or loss Exchange differences in translating financial statements of foreign operations (22.74) - (22.74) 290.02 - 290.02 Equity accounted investees - share of OCI 225.71 - 225.71 - - - Total 303.59 27.26 330.85 (31.55) 47.48 15.93 (c) Reconciliation of effective tax rate Particulars 2016-17 2015-16 % ` in Crores % ` in Crores Profit before tax 13,699.61 12,131.59 Tax using the Company’s domestic tax rate 34.61 4,741.16 34.61 4,198.49 Tax effect of: Differences in the tax rate of foreign jurisdictions* -0.02 (2.24) 0.11 12.94 Differences due to lower Tax Rate applicable on Subsidiary 0.14 18.73 0.05 6.58 Non-deductible tax expenses 0.37 51.03 1.81 219.81 Tax losses for which no deferred income tax was recognised 1.35 184.51 0.30 36.15 Tax-exempt income -0.47 (64.30) -0.32 (38.28) Interest expense not deductible for tax purposes 0.07 9.96 0.24 29.36 Incremental deduction allowed for research and development costs -0.13 (18.38) -0.18 (21.81) Investment allowance deduction -3.48 (477.04) -2.99 (363.18) Proposed dividend 0.45 62.16 0.02 2.16 Undistributed Reserves of Associates 0.44 60.04 0.37 45.05 Share of profit of equity accounted investees reported net of tax -2.00 (274.62) -1.00 (121.48) Others 0.09 12.87 0.22 26.29 Effective Income Tax Rate 31.42 4,303.88 33.24 4,032.08 Adjustments recognised in current year in relation to the current tax of prior years (111.24) 10.64 Income Tax Expense 4,192.64 4,042.72

|51| Chap. 6 – Ind AS 12 — Income Taxes (d) Movement in deferred tax balances ` in Crores As at 31/03/2017 Particulars Net balance as at 01/04/2016 Recognised in profit or loss Recognised in OCI Recognised directly in equity Net Balance Deferred tax asset Deferred tax liability Deferred tax Asset / (Liabilities) Property, Plant and Equipment (4,131.38) (1,148.51) - - (5,279.89) - (5,279.89) Intangible assets (31.57) 5.14 - - (26.43) - (26.43) Derivatives 0.29 (1.55) - - (1.26) - (1.26) Inventories 18.16 45.27 - - 63.43 63.43 - Investments 122.37 (69.90) (1.93) - 50.54 50.54 - Trade and other receivables 111.69 (14.49) - - 97.20 97.20 - Loans and borrowings 13.74 1.22 - - 14.96 14.96 - Employee benefits 478.93 173.79 28.89 - 681.61 681.61 - Deferred income (6.60) 6.60 - - - - - Proposed dividend (66.69) (62.16) - - (128.85) - (128.85) Provisions 411.22 (254.21) - - 157.01 157.01 - Other Current Liabilities 200.95 161.25 - - 362.20 362.20 - Deferred Tax on Inter-company transaction (63.32) (3.02) - 126.64 60.30 60.30 - Other items (129.76) 24.97 0.30 (1.13) (105.62) - (105.62) Tax Assets /(Liabilities) (3,071.97) (1,135.60) 27.26 125.51 (4,054.80) 1,487.25 (5,542.05) (e) Movement in deferred tax balances ` in Crores As at 31/03/2016 Particulars Net balance as at 01/04/2015 Recognised in profit or loss Recognised in OCI Recognised directly in equity Net Balance as at Deferred tax asset Deferred tax liability Deferred tax Asset / (Liabilities) Property, Plant and Equipment (3,414.82) (716.56) - - (4,131.38) - (4,131.38) Intangible assets (13.47) (18.10) - - (31.57) - (31.57) Derivatives (7.44) 7.73 - - 0.29 0.29 - Inventories (26.45) 44.61 - - 18.16 18.16 - Investments 100.93 22.76 (1.32) - 122.37 122.37 - Trade and other receivables 91.15 20.54 - - 111.69 111.69 - Loans and borrowings 8.39 5.35 - - 13.74 13.74 - Employee benefits 452.05 (21.95) 48.83 - 478.93 478.93 - Deferred income (6.64) 0.04 - - (6.60) - (6.60) Proposed dividend (63.57) (2.16) - (0.96) (66.69) - (66.69) Provisions 371.98 39.24 - - 411.22 411.22 - Other Current Liabilities 108.13 92.82 - - 200.95 200.95 -

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |52| ` in Crores As at 31/03/2016 Particulars Net balance as at 01/04/2015 Recognised in profit or loss Recognised in OCI Recognised directly in equity Net Balance as at Deferred tax asset Deferred tax liability Deferred Tax on Inter-company transaction (63.32) - - - (63.32) - (63.32) Other items (41.81) (87.95) - - (129.76) - (129.76) Tax Assets /(Liabilities) (2,504.89) (613.63) 47.51 (0.96) (3,071.97) 1,357.35 (4,429.32) (f) As at 31st March 2017, undistributed earning of subsidiaries and joint ventures amounted to ` 5,238.85 Crores (31st March 2016: ` 4,261.55 Crores; 1st April 2015: ` 3,569.71 Crores) The corresponding deferred tax liability of ` 1,813.06 Crores (31st March 2016: ` 1,474.84 Crores; 1st April 2015: ` 1,235.41 Crores) was not recognised because the Company controls the dividend policy of its subsidiaries and is able to veto the payment of dividends of its joint ventures - i.e. the Company controls the timing of reversal of the related taxable temporary differences and management is satisfied that they will not reverse in the foreseeable future. (g) Tax losses carried forward Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom: ` in Crores Particulars As at 31/03/2017 As at 31/03/2017 As at 31/03/2016 As at 31/03/2016 As at 01/04/2015 As at 01/04/2015 Gross amount Expiry date Gross amount Expiry date Gross amount Expiry date Business loss - - - - 7.21 2015-16 Business loss - - 13.74 2016-17 13.74 2016-17 Business loss 97.58 2017-18 97.58 2017-18 97.58 2017-18 Business loss 113.48 2018-19 113.48 2018-19 113.48 2018-19 Business loss 275.48 2019-20 275.48 2019-20 275.48 2019-20 Business loss 399.03 2020-21 399.03 2020-21 399.03 2020-21 Business loss 63.56 2021-22 63.56 2021-22 63.56 2021-22 Business loss 29.79 2022-23 29.79 2022-23 29.79 2022-23 Long-term Capital loss 0.53 2018-19 0.53 2018-19 0.53 2018-19 Unabsorbed depreciation 53.75 No expiry date 6.92 No expiry date 6.67 No expiry date Business loss 8.06 2023-24 8.06 2023-24 - - Business loss 115.96 2024-25 - - - - Note: The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

|53| Chap. 6 – Ind AS 12 — Income Taxes 4. CIPLA LIMITED ACCOUNTING POLICY Significant Accounting Policies and Key Accounting Estimates and Judgments Taxes Income tax expense comprises of current tax expense and deferred tax expenses. Current and deferred taxes are recognised in Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognized in Other Comprehensive Income or directly in equity, respectively. Current Income Tax Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income-Tax Act of the respective jurisdiction. The current tax is calculated using tax rates that have been enacted or substantively enacted, at the reporting date. Deferred Tax Deferred tax is recognised using the Balance Sheet approach on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred tax liabilities are recognised for all taxable temporary differences Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities. Judgments Deferred Income Taxes The assessment of the probability of future taxable profit in which deferred tax assets can be utilised is based on the Group’s latest approved forecast, which is adjusted for significant non-taxable profit and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable profit indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. Estimates Current Income Taxes The major tax jurisdictions for the Group are India, US and South Africa, though the Group companies also files tax returns in other foreign jurisdictions. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |54| tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances. Note 10: Income Taxes The major components of income tax expense for the years ended 31st March, 2017 and 31st March, 2016 are: Statement of Profit and Loss: ` in Crore Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 Current Tax: Current Income Tax Charge 479.48 470.24 Deferred Tax: Relating to Origination and Reversal of Temporary Differences (299.72) (138.65) Income tax Expense reported in the Statement of Profit or Loss 179.76 331.59 OCI section — Deferred Tax related to items recognised in OCI during the year: ` in Crore Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 Net Loss/(Gain) on Re-measurements of Defined Benefit Plans (3.96) 4.38 Income tax Expense charged to OCI (3.96) 4.38 Reconciliation of tax Expense and the accounting profit multiplied by India’s domestic tax rate for 31st March, 2017 and 31st March, 2016: ` in Crore Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 Profit before Tax 1222.17 1727.03 At India’s statutory income tax rate of 34.608% (31st March, 2016: 34.608%) 422.97 597.69 Effect of (Lower) / Higher Tax Rate in respective jurisdiction (53.69) (5.94) Prior Year adjustments to Deferred Tax (8.25) (12.95) Weighted Deductions and Exemption (349.82) (319.32) Non deductible expenses for tax purpose 49.78 61.72 Deferred Tax not recognised (net) 117.82 5.63 Others (2.00) 1.63 Differential Tax Rate Impact 2.95 3.13 Income tax expense reported in the statement of profit and loss 179.76 331.59 Effective Income Tax Rate 14.71% 19.20% There are unused tax losses amounting to ` 470.27 crore as at 31st March, 2017 for which no deferred tax asset has been recognised as the Company believes that availability of taxable profit against which such temporary difference can be utilised, is not probable. Deferred income tax liabilities on undistributed earnings of the Group subsidiaries have not been provided as such earnings are deemed to be reinvested in the business and the Group is able to control the timing of the reversals of temporary differences associated with these investments. Accordingly, temporary difference on which deferred tax liability has not been recognised amounts to ` 1357.10 crore, ` 1084.93 crore and ` 1048.02 crore as at 31st March, 2017, 31st March, 2016 and 1st April, 2015, respectively.

|55| Chap. 6 – Ind AS 12 — Income Taxes Deferred Tax Deferred Tax relates to the following: ` in Crore Particulars Balance Sheet Profit & Loss As at 31st March, 2017 As at 31st March, 2016 As at 1st April,2015 For the year ended 31st March, 2017 For the year ended 31st March, 2016 Property, Plant and Equipment and Intangible Assets (1346.07) (1498.86) (626.38) 174.26 (72.62) Employee Benefit Expenses 72.28 90.71 75.88 (18.92) 15.88 Others 128.37 88.41 71.96 14.56 15.64 Provision for Doubtful Debts 51.77 39.21 22.20 12.67 16.60 Deferred Revenue 28.28 30.73 27.30 (2.45) 3.43 Provision for Right of Return 51.56 54.82 22.84 (3.27) 31.98 Tax Loss Carried forward 60.91 115.03 107.85 (58.36) 16.36 Mat Credit entitlement 364.14 182.91 71.53 181.23 111.38 Deferred Tax Expense/(Income) in statement of Profit and Loss 299.72 138.65 Net Deferred Tax Assets/(Liabilities) (588.76) (897.04) (226.82) Reflected in the balance sheet as follows: ` in Crore Particulars As at 31st March, 2017 As at 31st March, 2016 As at 1st April, 2015 Deferred Tax Assets 168.13 78.69 80.44 Deferred Tax Liabilities (756.89) (975.73) (307.26) Deferred Tax Assets/(Liabilities) (net) (588.76) (897.04) (226.82) Reconciliation of Deferred Tax Liabilities (net) ` in Crore Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 Opening Balance (897.04) (226.81) Tax income during the period recognised in profit or loss 299.72 138.65 Tax income/(expense) during the period recognised in OCI 3.96 (4.38) Business Combination - (833.61) Assets Held for Sale (net) (Refer Note 20) (1.64) Exchange Difference 6.24 29.11 Closing Balance (588.76) (897.04) Notes to first time adoption of Ind AS Deferred Tax Deferred tax under Ind AS has been recognised for temporary differences between tax base and the book base of the relevant assets and liabilities. Under IGAAP, the deferred tax was accounted based on timing differences impacting the profit or loss for the period. Deferred Tax on aforesaid Ind AS adjustments has been created for both periods — as on 31st March, 2016 and 1st April, 2015. With respect of clarification dated 15th May, 2017 issued by Ind AS Transition Facilitation Group, Deferred tax liability has been provided by parent company if it is probable that the accumulated undistributed profits will be distributed in foreseeable future from subsidiary company. Deferred taxes in relation to business combinations have been recognised under Ind AS.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |56| 5. LARSEN & TOUBRO LIMITED ACCOUNTING POLICY Taxes on income Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals. Dividend distribution tax paid on profits distributed by the subsidiary company during the period is treated as an item of expense and recognised in the Statement of Profit and Loss. The dividend distribution tax paid in earlier years for which set off is available against the tax liability arising out of the dividend distribution by the Parent Company is recognised as an item of income in the period in which such set off is availed with corresponding effect in the equity to the extent of such set off. Both the recognition of expense and income as aforesaid are separately disclosed in the Statement of Profit and Loss as provision/reversal of additional tax on dividend distributed by subsidiaries. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group’s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Dividend distribution tax payable on profits of subsidiary companies which are proposed to be distributed in foreseeable future, is recognised as deferred tax liability with corresponding effect in the Statement of Profit and Loss in the period in which such profits are proposed to be so distributed. Such liability is reversed in the period in which the profits are distributed by the subsidiary company. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head “Capital gains” are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable of such unutilised tax credits will get realised. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.

|57| Chap. 6 – Ind AS 12 — Income Taxes Disclosure pursuant to Ind AS 12 “Income Taxes” (a) Major components of tax expense/(income): ` crore Sr. no. Particulars 2016-17 2015-16 Consolidated Statement of Profit and Loss (a) Profit and Loss section: (i) Current Income tax : Current income tax expense 2975.63 2780.73 Tax expense of prior periods 0.68 36.96 2976.31 2817.69 (ii) Deferred Tax: Tax expense on origination and reversal of temporary differences (767.50) (377.75) Effect of previously unrecognised tax losses and tax offsets used to reduce tax expense (60.26) (2.98) (827.76) (380.73) Income tax expense reported in the consolidated Statement of Profit and Loss [(i)+(ii)] 2148.55 2436.96 (b) Other Comprehensive Income (OCI) section: (i) Items not to be reclassified to profit or loss in subsequent periods: Current tax expense/(income): On remeasurement of defined benefit plans (5.95) (3.64) (5.95) (3.64) (ii) Items to be reclassified to profit or loss in subsequent periods: (A) Current tax expense/(income): Forward covers settled, retained in hedging reserve (22.79) 75.05 (22.79) 75.05 (B) Deferred tax expense/(income): Net gain/(loss) on cost of hedging reserve (23.14) 6.00 On Mark-to-Market (MTM) of cash flow hedges 265.41 8.55 On gain/(loss) on fair value of debt securities 1.09 (1.29) On foreign currency translation (2.29) 2.20 241.07 15.46 Income tax expense reported in the other comprehensive income [(i)+(ii)] 212.33 86.87 (c) Retained earnings: Current income tax (135.15) – Deferred tax 134.85 – Income tax expense reported in retained earnings (0.30) – (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: ` crore Sr. no. Particulars 2016-17 2015-16 (a) Profit before tax 8887.36 8019.62 (b) Corporate tax rate as per Income tax Act, 1961 34.61% 34.61% (c) Tax on accounting profit (c)=(a)*(b) 3075.74 2775.43 (d) (i) Tax on Income exempt from tax: (A) Dividend income and interest on tax free bonds (244.71) (43.32) (B) Long term capital gains exempt from tax (3.27) (48.83) (ii) Tax on expense not tax deductible: (A) Corporate Social Responsibility (CSR) expenses 42.37 46.97

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |58| ` crore Sr. no. Particulars 2016-17 2015-16 (B) Expenses in relation to exempt income 20.51 50.75 (C) Tax on employee perquisites borne by the Group 3.38 2.67 (iii) Weighted deduction on R&D expenditure and deduction u/s 80-IA (377.63) (278.96) (iv) Tax effect on impairment losses recognised and on which deferred tax asset (DTA) is not recognised 97.25 – (v) Effect of previously unrecognised tax losses used to reduce tax expense (153.54) (103.22) (vi) Tax effect of losses of current year on which no deferred tax benefit is recognised 398.43 440.91 (vii) Effect of tax paid on foreign source income which is exempt from tax in India u/s 10AA (198.61) (231.88) (viii) Effect of tax benefit on business combination under common control (228.69) – (ix) Tax effect on various other Items (282.68) (173.56) Total effect of tax adjustments [(i) to (ix)] (927.19) (338.47) (e) Tax expense recognised during the year (e)=(c)+(d) 2148.55 2436.96 (f) Effective tax Rate (f)=(e)/(a) 24.18% 30.39% (c)(i) Unused tax losses and unused tax credits for which no deferred tax asset is recognised in Balance Sheet Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 ` crore Expiry year ` crore Expiry year ` crore Expiry year Tax losses (revenue loss on which no tax asset is created) - Amount of losses having expiry 3235.46 AY 2017- 38 2824.45 AY 2017- 37 2122.59 AY 2017- 36 - Amount of losses having no expiry 513.33 – 336.96 – 133.78 – Tax losses (capital loss on which no tax asset is created) 2931.96 AY 2022- 26 1411.15 AY 2020- 25 249.46 AY 2020- 24 Unused tax credits [Minimum Alternate Tax (MAT) credit not recognised] 145.40 AY 2029- 33 150.62 AY 2024- 27 51.26 AY 2024- 26 Total 6826.15 4723.18 2557.09 (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet ` crore Sr. no. Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 (a) Deductible temporary differences towards provision for diminution in value of investments on which DTA not created 350.47 69.47 46.04 (b) Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 2164.85 1920.13 1680.94 Total 2515.32 1989.60 1726.98

|59| Chap. 6 – Ind AS 12 — Income Taxes (d)(i) Major components of Deferred Tax Liabilities and Deferred Tax Assets: ` crore Particulars Deferred tax liabilities/ (assets) as at 31-3-2016 Charge/ (credit) to Statement of Profit and Loss Charge/ (credit) to Retained Earnings MAT credit utilised Effect due to acquisition/ disposal Charge/ (credit) to other comprehensive income Exchange Difference Deferred tax liabilities/ (assets) as at 31-3-2017 Deferred tax liabilities: - Difference between book and tax depreciation 1105.00 (315.85) – – 1.48 – – 790.63 - Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 116.03 36.05 – – 0.01 – – 152.09 - Gain on Derivative Transactions to be offered for tax purposes in the year of transfer/settlement 6.17 4.78 – – – 34.41 – 45.36 - Other items giving rise to temporary differences 400.19 (134.96) – – (0.01) – (1.10) 264.12 Deferred tax liabilities: 1627.39 (409.98) – – – 1.48 34.41 (1.10) 1252.20 Offsetting of deferred tax liabilities with deferred tax(assets) (991.91) (641.25) Net Deferred tax liabilities 635.48 610.95 Deferred tax (assets): - Provision for doubtful debts, advances and non-performing assets debited to Statement of Profit and Loss (1037.33) (537.95) – – – – – (1575.28) - Unpaid statutory liabilities (215.72) (20.93) – – 0.01 – – (236.64) - Unabsorbed depreciation (412.78) 258.50 – – 3.69 – – (150.59) - Carried forward tax losses (323.30) 199.64 – – – – – (123.66) - Utilised MAT credit (382.57) (300.01) – 14.61 8.96 – – (659.01) - Loss on derivative transactions to be claimed for tax purposes in the year of transfer/settlement (133.56) (53.90) – – 207.86 – 20.40 - Difference between book and tax depreciation (88.03) 55.88 – – – – – (32.15) - Other items giving rise to temporary differences 229.47 (19.01) 134.85 – 36.85 (1.20) (1.43) 379.53 Deferred tax (assets): (2363.82) (417.78) 134.85 14.61 49.51 206.66 (1.43) (2377.40) Offsetting of deferred tax (assets) with deferred tax liabilities 991.91 641.25 Net Deferred tax (assets) (1371.91) (1736.15) Net deferred tax liability/(assets) (736.43) (827.76) 134.85 14.61 50.99 241.07 (2.53) (1125.20)

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |60| (ii) Major components of Deferred Tax Liabilities and Deferred Tax Assets: ` crore Particulars Deferred tax liabilities/ (assets) as at 1-4-2015 Charge/ (credit) to Statement of Profit and Loss MAT credit utilised Effect due to acquisition/ disposal Held for sale Charge/ (credit) to other comprehensive income Exchange Difference Deferred tax liabilities/ (assets) as at 31-3-2016 Deferred tax liabilities: - Difference between book and tax depreciation 807.55 323.32 – (25.87) – – 1105.00 - Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 102.11 13.92 – – – – 116.03 - Gain on Derivative Transactions to be offered for tax purposes in the year of transfer/settlement 23.50 (5.53) – – (11.80) – 6.17 - Other items giving rise to temporary differences 432.06 (41.52) – 0.01 – 9.64 400.19 Deferred tax liabilities: 1365.22 290.19 – (25.86) (11.80) 9.64 1627.39 Offsetting of deferred tax liabilities with deferred tax(assets) (705.73) (991.91) Net Deferred tax liabilities 659.49 635.48 Deferred tax (assets): - Provision for doubtful debts, advances and non-performing assets debited to Statement of Profit and Loss (822.47) (214.86) – – – – (1037.33) - Unpaid statutory liabilities (190.24) (25.48) – – – – (215.72) - Unabsorbed depreciation (57.52) (346.63) – (8.63) – – (412.78) - Carried forward tax losses (401.36) 78.06 – – – – (323.30) - Unutilised MAT credit (201.23) (184.97) 3.42 0.21 – – (382.57) - Loss on derivative transactions to be claimed for tax purposes in the year of transfer/settlement (173.08) 13.17 – – 26.35 – (133.56) - Difference between book and tax depreciation (85.28) (13.12) – 10.37 – – (88.03) - Other items giving rise to temporary differences 215.55 22.91 – 1.54 0.91 (11.44) 229.47 Deferred tax (assets): (1715.63) (670.92) 3.42 3.49 27.26 (11.44) (2363.82) Offsetting of deferred tax (assets) with deferred tax liabilities 705.73 991.91 Net Deferred tax (assets) (1009.90) (1371.91) Net deferred tax liability/(assets) (350.41) (380.73) 3.42 (22.37) 15.46 (1.80) (736.43) Notes to first time adoption of Ind AS Deferred tax under Ind AS has been recognised for temporary differences between tax base and the book base of the relevant assets and liabilities. Under I-GAAP the deferred tax was accounted based on timing differences impacting the profit or loss for the period.

|61| Chap. 6 – Ind AS 12 — Income Taxes 6. THE INDIAN HOTELS COMPANY LIMITED ACCOUNTING POLICY Critical accounting estimates and judgements Income Taxes Deferred tax assets are recognised to the extent that it is regarded as probable that deductible temporary differences can be realised. The Group estimates deferred tax assets and liabilities based on current tax laws and rates and in certain cases, business plans, including management’s expectations regarding the manner and timing of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax liabilities or the valuation of deferred tax assets and there the tax charges in the statement of profit and loss. Provision for tax liabilities require judgments on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the statement of profit and loss. Significant accounting policies Income Taxes Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognised in the Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive Income or directly in equity, respectively. Current tax Current Tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the applicable tax rates at the end of the reporting period in the countries where the company and its subsidiaries and its associates and joint ventures operates and generates taxable income. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of the goodwill. The deferred income tax is also not accounted if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profits/(taxable loss). Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. Therefore, in case of a history of recent losses, the Group recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is other convincing evidence that sufficient taxable profit will be available against which such deferred tax assets can be realised. Deferred tax assets positions are reviewed at each reporting date and are recognised/reduced to the extent that it is probable/no longer probable respectively that the related tax benefit will be realised. Deferred tax liabilities are generally recognised for all taxable temporary differences except in respect of taxable temporary differences between the carrying amount and the tax bases of investments in subsidiaries,

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |62| associates and interests in joint ventures where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred income tax asset to be utilised. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Minimum Alternative Tax (“MAT”) credit forming part of deferred tax asset is recognised as an asset only when and to the extent there is reasonable certainty that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a reasonable certainty to the effect that the Company will pay normal income tax during the specified period. Note 38 : Income Tax Disclosure i) Income Tax recognised in the Statement Profit and Loss: Particulars March 31, 2017 ` crores March 31, 2016 ` crores Current Tax In respect of the current year 128.26 80.40 In respect of earlier years (2.50) (2.75) 125.76 77.65 Deferred Tax In respect of the current year MAT credit (0.07) (52.12) Other items (11.95) 65.10 (12.02) 12.98 Total tax expense recognised in the current year 113.74 90.63 ii) A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the profit before tax is summarised below: Particulars March 31, 2017 ` crores March 31, 2016 ` crores Profit/(Loss) before tax (a) 30.58 (91.17) Income tax rate as applicable in India (b) 34.61% 34.61% Calculated taxes based on above, without any adjustments for deductions [(a) x (b)] 10.58 (31.56) Permanent tax differences due to: Effect of income that is exempt from taxation (2.03) (17.24) Income considered to be capital in nature under tax and tax provisions (1.98) (2.84) Effect of expenses that are not deductible in determining taxable profit 38.08 55.57 Expense considered to be capital in nature under tax and tax provisions 6.42 32.83 Deferred tax asset not recognised in Statement of Profit and Loss 116.94 80.87 Effect on deferred tax balances due to the change in income tax rate 3.49 11.16

|63| Chap. 6 – Ind AS 12 — Income Taxes Effect of previously unrecognised and unused tax losses and deductible temporary differences now recognised as deferred tax assets (33.40) (31.32) Difference in tax rates between the company and components/ Jurisdiction (32.77) (20.21) Others 10.91 16.12 116.24 93.38 Prior year taxes as shown above (2.50) (2.75) Income tax expense recognised in the Statement of Profit and Loss 113.74 90.63 iii) Income tax recognised in other comprehensive income: Particulars March 31, 2017 ` crores March 31, 2016 ` crores Current Tax Tax impact on profit on sale of investment in equity shares at fair value through Other Comprehensive Income - 4.04 Deferred tax Arising on income and expenses recognised in other comprehensive income: Net fair value gain on investments in equity shares at fair value through Other Comprehensive Income (2.54) - Remeasurement of defined benefit obligation 2.98 (2.23) Reversal of Deferred Tax Liability on account of a investment fair valued through other comprehensive income - (12.99) Reversal of Deferred Tax Assets on Unused Tax Losses - 8.95 0.44 (6.27) Total income tax recognised in other comprehensive income 0.44 (2.23) Bifurcation of the income tax recognised in other comprehensive income into: Items that will not be reclassified to profit or loss 0.44 (2.23) 0.44 (2.23) iv) The following is the analysis of deferred tax assets/ (liabilities) presented in the balance sheet: Particulars March 31, 2017 ` crores March 31, 2016 ` crores April 1, 2015 ` crores Deferred Tax assets (net) 35.21 18.00 6.81 Deferred Tax liabilities (net) (317.25) (256.22) (238.09) Net Deferred Tax Liability (282.04) (238.22) (231.28) Significant components of net deferred tax assets and liabilities for the year ended March 31, 2017 are as follows: March 31, 2017 Opening Balance as at April 1, 2016 Recognised in the statement of profit and loss Recognised in other comprehensive income MAT credit utilised Exchange difference Closing balance ` crores ` crores ` crores ` crores ` crores ` crores Deferred tax (liabilities)/ assets: Property, Plant and Equipment & Intangible Assets (474.15) 15.80 - - 0.17 (458.18) Unamortised borrowing cost (0.90) 0.57 - - - (0.33) Provision for Employee Benefits 25.04 5.84 (2.98) - - 27.90

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |64| Fair valuation changes of derivative contracts (0.21) (15.73) - - - (15.94) Unrealised gain on equity shares carried at fair value through Other Comprehensive Income (6.24) - 2.54 - - (3.70) MAT Credit Entitlement 129.57 0.07 - (51.61) - 78.03 Unused tax losses (Business) 39.00 (0.86) (3.96) 34.18 Allowance for doubtful debts 4.14 0.31 - - - 4.45 Reward Points 19.25 (1.35) 17.90 Provision for Contingencies 18.60 2.52 21.12 Others 7.68 4.85 - - - 12.53 Total Deferred Tax Liability (238.22) 12.02 (0.44) (51.61) (3.79) (282.04) Significant components of net deferred tax assets and liabilities for the year ended March 31, 2016 are as follows: March 31, 2016 Opening Balance as at April 1, 2015 Recognised in the statement of profit and loss Recognised in other comprehensive income MAT credit utilised Exchange difference Closing balance ` crores ` crores ` crores ` crores ` crores ` crores Deferred tax (liabilities)/ assets: Property, Plant and equipment & Intangible Assets (419.01) (55.14) - - - (474.15) Unamortised borrowing cost (1.20) 0.30- - - - (0.90) Provision for Employee Benefits 15.85 6.96 2.23 - - 25.04 Fair valuation changes of derivative contracts 0.91 (1.12) - - - (0.21) Unrealised gain on equity shares carried at fair value through Other Comprehensive Income (19.23) - 12.99 - - (6.24) MAT Credit Entitlement 74.75 54.82 - - - 129.57 Unused tax losses (Business) 76.37 (37.14) - (0.23) 39.00 Unused tax losses (Capital) 8.95 - (8.95) - - - Allowance for doubtful debts 2.80 1.34 - - - 4.14 Reward Points 10.94 8.31 - - - 19.25 Provision for Contingencies 12.20 6.40 - - - 18.60 Others 5.39 2.29 - - - 7.68 Total Deferred Tax Liability (231.28) (12.98) 6.27 - (0.23) (238.22) Deferred tax asset amounting to ` 971.90 crores and ` 932.68 crores as at March 31, 2017 and March 31, 2016 respectively in respect of unused tax losses have not been recognised by the Group. The tax loss carry-forwards of ` 2,571.57 crores and ` 2,498.17 crores as at March 31, 2017 and March 31, 2016, respectively, relates to certain subsidiaries on which deferred tax asset has not been recognised by the Group, because there is a lack of reasonable certainty that these subsidiaries may generate future taxable profits. Approximately, ` 397.95 crores and ` 517.62 crores as at March 31, 2017 and March 31, 2016 respectively of these tax losses has carry-forwards is not currently subject to expiration dates. The remaining tax loss carry-forwards of approximately ` 2,173.62 crores and ` 1,980.56 crores as at March 31, 2017 and March 31, 2016 respectively, expires in various years through fiscal 2036. Deferred tax assets on unused tax losses has been recognised by certain subsidiaries to the extent of profits arising from the reversal of existing taxable temporary differences.

|65| Chap. 6 – Ind AS 12 — Income Taxes Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Accordingly, deferred income tax liabilities on cumulative earnings of subsidiaries amounting to ` 1,463 crores and ` 1999.41 crores as at March 31, 2017 and March 31, 2016, respectively has been not recognised. Further, it is not practicable to estimate the amount of the unrecognized deferred tax liabilities for these undistributed earnings. 7. LUPIN LIMITED ACCOUNTING POLICY Income tax Income tax expense comprises current tax and deferred tax. It is recognised in Consolidated Statement of Profit and Loss except to the extent that it relates items recognised directly in equity or in OCI. Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are offset only if the Group: i) has a legally enforceable right to set off the recognised amounts; and ii) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes (including those arising from consolidation adjustments such as unrealised profit on inventory etc.). Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if: i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |66| 43. Income taxes a) Tax expense recognised in profit and loss Particulars Year Ended 31.03.2017 ` in million Year Ended 31.03.2016 ` in million Current Tax Expense for the year 11656.9 11671.7 Tax expense w/back of prior years (514.7) (222.7) Fringe Benefit Tax w/back of prior years (260.1) (15.5) Net Current Tax Expense 10882.1 11433.5 Deferred income tax liability / (asset), net Origination and reversal of temporary differences (1097.0) (840.1) Tax expense for the year 9785.1 10593.4 b) Tax expense recognised in other comprehensive income Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans 130.2 20.2 Items that will be reclassified to profit or loss The effective portion of gains and loss on hedging instruments in a cash flow hedge (83.0) (4.3) Total 47.2 15.9 c) Reconciliation of effective tax rate Profit before tax before jointly controlled entity 35348.9 33239.4 Tax using the Company’s domestic tax rate (March 31, 2017: 34.61%, March 31, 2016: 34.61%) 12234.3 11504.2 Tax effect of: Differences in tax rates of foreign jurisdictions 1237.0 1610.0 Current year losses for which no deferred tax asset was recognised 859.5 874.2 Non-deductible expenses 497.5 811.1 Incremental deduction on account of Research and Development costs (3322.4) (1974.6) Exemption of profit link incentives (624.4) (1582.4) Investment Allowance (227.7) (205.6) Other exempt income (193.8) (158.1) Others 99.9 (47.2) Current and Deferred Tax expense (excluding prior year taxes) as per note 43(a) 10559.9 10831.6 d) Movement in deferred tax balances (Current year ` in million) Particulars As at 01.04.2016 As at 31.03.2017 Deferred tax asset Deferred tax liability Recognised in profit or loss Recognised in OCI Business Combination Foreign exchange translation difference Deferred tax asset Deferred tax liability Deferred tax assets/ (liabilities) Property, plant and equipment 23.2 (2796.4) (2328.3) - 110.2 (51.7) (63.7) (4979.3) Cash Flow Hedge Reserve - (96.4) 104.1 (83.0) - - - (75.3) Intangibles - (1875.1) 746.8 - (160.0) 146.9 - (1141.4) Provision for Employee Benefits 183.4 - (60.0) (1.3) - (4.8) 117.3 - Provision for Expenses 51.2 - 172.2 - - (8.3) 215.1 - Provision for Price Differential 107.8 - (107.8) - - - - - Provision for Sales Return 279.4 - (278.1) - - (0.1) 1.2 - Trade Receivables/Provision for Bad Debts - - 1142.8 - - (51.5) 1091.3 -

|67| Chap. 6 – Ind AS 12 — Income Taxes (Current year ` in million) Particulars As at 01.04.2016 As at 31.03.2017 Deferred tax asset Deferred tax liability Recognised in profit or loss Recognised in OCI Business Combination Foreign exchange translation difference Deferred tax asset Deferred tax liability Litigation Reserve - - 253.6 - - (8.5) 245.1 - Unrealised Profits on Unsold inventories 2535.3 - 816.6 - - - 3351.9 - Others 356.0 (87.7) (106.2) (1.7) - (119.1) 184.9 (143.6) 3536.3 (4855.6) 355.7 (86.0) (49.8) (97.1) 5143.1 (6339.6) Less: Tax effect of items constituting Deferred Tax (Liabilities)/Assets Provision for doubtful trade receivables - 125.5 (58.1) - - - - 67.4 Provision for Employee benefits - 526.1 193.9 133.2 - 25.4 - 878.6 Provision for Sales Return - 200.3 (198.5) - - - - 1.8 Deferred Revenue - 351.8 49.9 - - - - 401.7 Provision of claims - - 539.5 - - - - 539.5 Provision for Expenses - 18.2 75.1 - - (28.9) - 64.4 Government Grants - - 62.2 - - 17.5 - 79.7 Provision for Obsolete inventory - - 146.4 - 1.6 (57.6) - 90.4 Property, plant and equipment (75.2) - 75.2 - - - - - Reserve for Deferred Capital Gain (13.3) - 13.3 - - - - - Others (89.3) 366.9 (157.6) - - 80.9 (66.7) 267.6 (177.8) 1588.8 741.3 133.2 1.6 37.3 (66.7) 2391.1 Net Deferred tax assets / (liabilities) 3358.5 (3266.8) 1097.0 47.2 (48.2) (59.8) 5076.4 (3948.5) (Current year ` in million) Particulars As at 01.04.2015 As at 31.03.2015 Deferred tax asset Deferred tax liability Recognised in profit or loss Recognised in OCI Business Combination Foreign exchange translation difference Deferred tax asset Deferred tax liability Deferred tax assets/ (liabilities) Property, plant and equipment 24.9 (2512.2) (118.1) - (158.7) (9.1) 23.2 (2796.4) Cash Flow Hedge Reserve - (8.0) (78.1) (4.3) - (6.0) - (96.4) Intangibles - - (181.6) - (1679.6) (13.9) - (1875.1) Provision for Employee Benefits 220.6 - (34.6) - - (2.6) 183.4 - Provision for Expenses 39.2 - 11.1 - - 0.9 51.2 - Provision for Price Differential 75.5 - 30.0 - - 2.3 107.8 - Provision for Sales Return 120.8 - 147.3 - - 11.3 279.4 - Unrealised Profit on unsold inventory 1713.9 - 762.9 - - 58.5 2535.3 - Undistributed profits - (45.8) 42.6 - - 3.2 - - Other items 557.7 (142.4) (125.5) - (11.7) (9.8) 356.0 (87.7) 2752.6 (2708.4) 456.0 (4.3) (1850.0) 34.8 3536.3 (4855.6) Less: Tax effect of items constituting Deferred Tax (Liabilities)/Assets

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |68| (Current year ` in million) Particulars As at 01.04.2015 As at 31.03.2015 Deferred tax asset Deferred tax liability Recognised in profit or loss Recognised in OCI Business Combination Foreign exchange translation difference Deferred tax asset Deferred tax liability Provision for Doubtful Trade Receivables - 83.4 39.2 - - 2.9 - 125.5 Provision for Employee Benefits - 428.0 72.4 20.2 - 5.5 - 526.1 Provision for Sales Return - 189.6 9.9 - - 0.8 - 200.3 Deferred Revenue - 281.1 65.6 - - 5.1 - 351.8 Provision for Expenses - 13.7 4.2 - - 0.3 - 18.2 Property, plant and equipment (119.3) - 41.0 - - 3.1 (75.2) - Reserved for Deferred Capital Gain (13.1) - (0.2) - - - (13.3) - Other items (58.5) 185.1 152.0 - (12.8) 11.8 (89.3) 366.9 (190.9) 1180.9 384.1 20.2 (12.8) 29.5 (177.8) 1588.8 Net Deferred tax assets / (liabilities) 2561.7 (1527.5) 840.1 15.9 (1862.8) 64.3 3358.5 (3266.8) Significant management judgment is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered. Any changes in future taxable income would impact the recoverability of deferred tax assets. The current tax in respect of foreign subsidiaries has been computed considering the applicable tax laws and tax rates of the respective countries, as certified by the local tax consultants / local management of the said subsidiaries. As on 31.03.2017, tax liability with respect to the dividends proposed before the financial statements approved for issue, but not recognised as a liability in the financial statements is ` 689.5 million (31.03.2016 - ` 688.0 million, 01.04.2015 - ` 686.3 million). e) Tax losses carried forward: Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future profits will be available against which the Group can use the benefits therefrom. Particulars Expiry date As at 31.03.2017 ` in million As at 31.03.2016 ` in million Business loss c/f Unlimited 3448.2 3539.7 Business loss c/f 31.03.2019 - 0.1 Business loss c/f 31.03.2020 1320.5 1405.1 Business loss c/f 31.03.2021 1306.6 1392.3 Business loss c/f 31.03.2022 2964.5 3155.0 Business loss c/f 31.12.2022 5.3 5.3 Business loss c/f 31.03.2023 4559.5 4849.1 Business loss c/f 31.03.2024 5095.6 233.1 Business loss c/f 31.03.2025 672.0 672.3 Business loss c/f 31.03.2026 846.8 - Business loss c/f 31.12.2026 11.0 9.3 Business loss c/f 31.03.2027 0.4 - Business loss c/f 31.03.2033 24.8 54.8 Business loss c/f 31.03.2034 60.8 64.1 Business loss c/f 31.03.2035 63.1 66.5 Total 20379.1 15446.7

|69| Chap. 6 – Ind AS 12 — Income Taxes 8. VEDANTA LIMITED ACCOUNTING POLICY Taxation Tax expense represents the sum of current tax and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date and includes any adjustment to tax payable in respect of previous years. Subject to exceptions below, deferred tax is provided, using the balance sheet method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes and on carry forward of unused tax credits and unused tax losses: a) Tax payable on the future remittance of the past earnings of subsidiaries where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; b) Deferred income tax is not recognised on goodwill which is not deductible for tax purposes or on the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and c) Deferred tax assets are recognised only to the extent that it is more likely than not that they will be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or equity). The carrying amount of deferred tax assets (including MAT Credit available) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. 37 Tax expense (a) Tax charge/(credit) recognised in profit or loss (` in Crore) Particulars Year ended March 31, 2017 Year ended March 31, 2016 Current tax: Current tax on profit for the year 2,310.24 2,108.67 Charge/(credit) in respect of current tax for earlier years (8.73) (166.90) Total Current Tax 2,301.51 1,941.77 Deferred tax: Origination and reversal of temporary differences (93.46) (14,229.83) Impact of change in tax rate - 219.70 Charge in respect of deferred tax for earlier years (71.56) (230.23) Total Deferred Tax (165.02) (14,240.36) Distribution tax on dividend from subsidiaries 1,641.82 1,621.04 3,778.31 (10,677.55) Effective income tax rate (%) 27.68% 37.41%

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |70| (b) A reconciliation of income tax expense applicable to accounting profit/ (loss) before tax at the statutory income tax rate to recognised income tax expense/ (credit) for the year indicated are as follows: (` in Crore) Year ended March 31, 2017 Year ended March 31, 2016 Accounting profit/(loss) before tax 13,651.57 (28,540.17) Statutory income tax rate 34.61% 34.61% Tax at statutory income tax rate 4,724.54 (9,877.18) Disallowable expenses 96.89 81.84 Non-taxable income (1,037.48) (1,052.22) Tax holidays and similar exemptions (1,269.99) (597.97) Investment allowances (482.09) (350.65) Change in deferred tax balances due to change in income tax rate from 33.99% to 34.61% - 219.70 Effect of tax rate differences of subsidiaries operating in other jurisdictions (332.15) (1,006.40) Dividend distribution tax 1,641.82 1,621.04 Charge/(credit) in respect of earlier years (80.29) (397.13) Unrecognised tax assests (net) 660.56 748.45 Other permanent differences (143.50) (67.03) 3,778.31 (10,677.55) There are certain income-tax related legal proceedings which are pending against the Group. Potential liabilities, if any have been adequately provided for, and the Group does not currently estimate any probable material incremental tax liabilities in respect of these matters. (Refer note 49A) Certain businesses of the Group within India are eligible for specified tax incentives which are included in the table above as tax holidays and similar exemptions. Most of such tax exemptions are relevant for the companies operating in India. These are briefly described as under: The location based exemption In order to boost industrial and economic development in undeveloped regions, provided certain conditions are met, profits of newly established undertakings located in certain areas in India may benefit from a tax holiday. Such a tax holiday works to exempt 100% of the profits for the first five years from the commencement of the tax holiday, and 30% of profits for the subsequent five years. This deduction is available only for units established up to March 31, 2012. However, such undertaking would continue to be subject to the Minimum Alternative tax (‘MAT’). The Group has such types of undertakings at Haridwar and Pantnagar, which are part of Hindustan Zinc Limited (Zinc India). In the current year, Haridwar and Pantnagar units are eligible for deduction at 30% of taxable profits. Sectoral Benefit - Power Plants and Port Operations To encourage the establishment of infrastructure certain power plants and ports have been offered income tax exemptions of up to 100% of profits and gains for any ten consecutive years within the 15 year period following commencement of operations subject to certain conditions. The Group currently has total operational capacity of 8.4 Giga Watts (GW) of thermal based power generation facilities and wind power capacity of 274 MW and port facilities. However, such undertakings would continue to be subject to MAT provisions. The Group has power plants which benefit from such deductions, at various locations of Hindustan Zinc Limited (where such benefits has been drawn), Talwandi Sabo Power Limited, Vedanta Limited and Bharat Aluminium Company Limited (where no benefit has been drawn) and port facilities at Vizag General Cargo Berth Limited(where no benefit has been drawn).

|71| Chap. 6 – Ind AS 12 — Income Taxes Sectoral benefit – Oil & Gas Provided certain conditions are met, profits of newly constructed industrial undertakings engaged in the oil & gas sector may benefit from a deduction of 100% of the profits of the undertaking for a period of seven consecutive years. This deduction is only available to blocks licensed prior to March 31, 2011. However, such businesses would continue to be subject to the MAT provisions. In the Group, erstwhile Cairn India Limited (now merged with Vedanta Limited) and Cairn Energy Hydrocarbons Limited benefited from such deductions till March 31, 2016. The total effect of such tax holidays and exemptions was ` 1,269.99 Crore for the year ended March 31, 2017 (March 31, 2016: ` 597.97 Crore). Investment Allowance u/s 32AC of the Income Tax Act - Incentive for acquisition and installation of new high value plant or Machinery to manufacturing companies by providing an additional deduction of 15% of the actual cost of plant or Machinery acquired and installed during the year. The actual cost of the new Plant or Machinery should exceed ` 25 Crore. to be eligible for this deduction. Deduction u/s. 32AC is available up to financial year March 31, 2017. In addition, the subsidiaries incorporated in Mauritius are eligible for tax credit to the extent of 80% of the applicable tax rate on foreign source income. (c) Deferred tax assets/liabilities The Group has accrued significant amounts of deferred tax. The majority of the deferred tax liability represents accelerated tax relief for the depreciation of property, plant and equipment and the depreciation on mining reserves, net of losses carried forward by Vedanta Limited (post the re-organisation) and unused tax credits in the form of MAT credits carried forward in Vedanta Limited, Cairn Energy Hydrocarbons Limited and Hindustan Zinc Limited. Significant components of Deferred tax (assets) and liabilities recognized in the consolidated statements of Financial position are as follows : For the year ended March 31, 2017 (` in Crore) Significant components of Deferred tax (assets) & liabilities Opening balance as at April 01, 2016 Charged / (credited) to statement of profit or loss Charged / (credited) to other comprehensive income Charged / (credited) to Equity Exchange difference transferred to translation of foreign operation Closing balance as at March 31, 2017 Property, Plant and Equipment 11,027.93 43.76 - - (15.52) 11,056.17 Voluntary Retirement Scheme (58.91) 11.19 - - - (47.72) Employee benefits (73.20) (4.89) (2.74) - - (80.83) Fair valuation of derivative asset/ liability (17.73) (25.86) 9.93 - - (33.66) Fair valuation of other asset/liability 1,184.10 (83.80) 0.00 - 19.84 1,120.14 MAT credit entitlement (13,046.44) 693.35 (27.78) - - (12,380.87) Unabsorbed depreciation and tax losses (3,921.56) (498.40) - - - (4,419.96) Other temporary differences (362.04) (300.37) 21.70 4.28 14.81 (621.62) Total (5,267.85) (165.02) 1.11 4.28 19.13 (5,408.35)

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |72| For the year ended March 31, 2016 (` in Crore) Significant components of Deferred tax (assets) & liabilities Opening balance as at April 01, 2015 Charged / (credited) to statement of profit or loss Charged / (credited) to other comprehensive income Charged / (credited) to Equity Exchange difference transferred to translation of foreign operation Closing balance as at March 31, 2016 Property, Plant and Equipment 22,054.12 (11,671.13) - - 644.94 11,027.93 Voluntary retirement scheme (38.62) (20.29) - - - (58.91) Employee benefits (95.77) 25.51 (4.41) - 1.47 (73.20) Fair valuation of derivative asset/ liability (18.82) (7.39) 8.48 - - (17.73) Fair valuation of other asset/liability 1,354.36 (170.26) - - - 1,184.10 MAT credit entitlement (11,880.45) (1,167.13) - 1.14 - (13,046.44) Unabsorbed depreciation and tax losses (3,083.36) (838.20) - - - (3,921.56) Other temporary differences (36.35) (322.90)* - - (2.79) (362.04) Total 8,255.11 (14,171.79) 4.07 1.14 643.62 (5,267.85) *Includes ` 68.57 Crore of Distribution tax on dividend from subsidiaries. Deferred tax assets and liabilities have been offset where they arise in the same legal entity and taxing jurisdiction but not otherwise. Accordingly the net deferred tax (assets)/liability has been disclosed in the Balance Sheet as follows : (` in Crore) As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Deferred tax assets (7,492.02) (8,518.60) (7,494.69) Deferred tax liabilities 2,083.67 3,250.75 15,749.80 Net Deferred tax (assets) / liabilities (5,408.35) (5,267.85) 8,255.11 Deferred tax assets on carry forward unused tax losses have been recognised to the extent of deferred tax liabilities on taxable temporary differences available. It is expected that any reversals of the deferred tax liability would be offset against the reversal of the deferred tax asset at respective entities. Unused tax losses / unused tax credit for which no deferred tax asset is recognized amount to ` 12,821.43 Crore, ` 14,822.62 Crore and ` 9,852.84 as at March 31, 2017, March 31, 2016 and April 01, 2015 respectively. The unused tax losses expire as detailed below: As at March 31, 2017 (` in Crore) Unrecognised deferred tax assets Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilised business losses 1,745.00 4,948.84 899.69 1,183.07 8,776.60 Unabsorbed depreciation - - - 3,740.26 3,740.26 Unutilised MAT credit - - 295.92 - 295.92 Unused R&D tax credit - - - 8.65 8.65 Total 1,745.00 4,948.84 1,195.61 4,931.98 12,821.43

|73| Chap. 6 – Ind AS 12 — Income Taxes As at March 31, 2016 (` in Crore) Unrecognised deferred tax assets Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilised business losses - 6,557.02 360.68 923.63 7,841.33 Unabsorbed depreciation - - - 3,877.52 3,877.52 Capital losses - 269.70 2,425.69 - 2,695.39 Unutilised MAT credit 103.56 284.21 11.71 - 399.48 Unused R&D tax credit - - - 8.90 8.90 Total 103.56 7,110.93 2,798.08 4,810.05 14,822.62 As at April 1, 2015 (` in Crore) Unrecognised deferred tax assets Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilised business losses - 4,799.96 616.51 246.58 5,663.05 Unabsorbed depreciation - - - 2,348.98 2,348.98 Capital losses 0.62 652.56 760.02 - 1,413.20 Unutilised MAT credit 19.79 220.95 178.53 - 419.27 Unused R&D tax credit - - - 8.34 8.34 Total 20.41 5,673.47 1,555.06 2,603.90 9,852.84 The Group has not recognised any deferred tax liabilities for taxes that would be payable on the Group’s share in unremitted earnings of certain of its subsidiaries because the Group controls when the liability will be incurred and it is probable that the liability will not be incurred in the foreseeable future. The amount of unremitted earnings are ` 32,879.75 Crore, ` 53,084.28 Crore and ` 51,781.49 Crore as at March 31, 2017, March 31, 2016 and April 01, 2015 respectively. ll

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |74| Chapter 7 Ind AS 16 — Property, Plant & Equipment 1. ADANI POWER LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Land and building held for use in the production or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Free hold land is not depreciated. Property, plant and equipment are stated at original cost grossed up with the amount of tax / duty benefits availed, less accumulated depreciation and accumulated impairment losses, if any. Properties in the course of construction are carried at cost, less any recognised impairment losses. All costs, including borrowing costs incurred up to the date the asset is ready for its intended use, is capitalised alongwith respective asset. Fixtures equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is recognised based on the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The useful life of property, plant and equipment is considered based on life prescribed in schedule II to the Companies Act, 2013 except in case of power plant assets, in whose case the life has been estimated at 25 years based on technical assessment, taking into account the nature of assets, the estimated usage of the assets, the operating condition of the assets, anticipated technical changes, manufacturer warranties and maintenance support. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss. For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of 1st April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date. Significant accounting judgements, estimates and assumptions The application of the Company’s accounting policies as described in Note 2, in the preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an ongoing basis and any revisions thereto are recognized in the period in which they are revised or in the period of revision and future periods if the revision affects both the current and future periods. Actual results may differ from these estimates which could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

|75| Chap. 7 – Ind AS 16 — Property, Plant & Equipment Estimates and assumptions The estimates at 1st April, 2015 and at 31st March, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April, 2015, the date of transition to Ind AS and as of 31st March, 2016. Key Sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Useful lives of property, plant and equipment In case of the power plant assets, in whose case the life of the assets has been estimated at 25 years based on technical assessment, taking into account the nature of the assets, the estimated usage of the asset, the operating condition of the asset, anticipated technological changes, manufacturer warranties and maintenance support, depreciation on the same is provided based on the useful life of each such component based on technical assessment, if materially different from that of the main asset w.e.f. 1st April 2015. Refer note 5.1 for details of value of power plant and its depreciation. Notes to Accounts – Notes below notes to accounts The Company has availed tax and duty benefit in the nature of exemptions from Custom Duty, Excise Duty, Service Tax, VAT and CST on its project procurements with respect to its power plant located at Mundra, Gujarat. The said benefits were availed by virtue of SEZ approval granted to the Company in December 2006, in terms of the provisions of the Special Economic Zones Act, 2005 (hereinafter referred to as the ‘SEZ Act’) and the Special Economic Zone Rules, 2006 which entitled the plant to procure goods and services without payment of taxes and duties as referred above. Since, the procurement of goods and services during the project period were done by availing the exemption from payment of aforesaid taxes and duties, the amount capitalised for the said power plant as on the put to use date, is cost of property, plant and equipment (PPE) net off tax and duty benefit availed. In compliance with Ind AS 20 – “Government Grant”, the Company has grossed up the value of its PPE by the amount of tax and duty benefit availed by the Company is after considering the same as government grant. The amount of said government grant (net off accumulated depreciation) as on the transition date has been added to the value of PPE with corresponding credit to the deferred government grant. The amount of grant shall be depreciated as per useful life of PPE along with depreciation on PPE. The amount of deferred liability shall be amortised over the useful life of the PPE with credit to statement of profit and loss under the head “Other Operating Income”. The Company has recognised Government grant of H4,277.96 crores from the date of capitalisation of plant. As on 1st April, 2015, Plant and Equipment includes Government grant of H4,277.96 crores in Gross block and H513.95 crores in accumulated depreciation. 2. ASIAN PAINTS LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Measurement at recognition: An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |76| The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item. The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other non- refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Any trade discounts and rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of property, plant and equipment if the recognition criteria are met. Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred. Capital work in progress and Capital advances Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets. Depreciation Depreciation on each part of an item of property, plant and equipment is provided using the Straight Line Method based on the useful life of the asset as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considers the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc. The estimated useful life of items of property, plant and equipment is mentioned below: Years Factory Buildings 30 Buildings (other than factory buildings) 60 Plant and Equipment (including continuous process plants) 10-20 Scientific research equipment 8 Furniture and Fixtures 8 Office Equipment and Vehicles 5 Information Technology Hardware 4 Freehold land is not depreciated. Leasehold land and Leasehold improvements are amortized over the period of the lease. The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property plant and equipment (as mentioned below) over estimated useful lives which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 (Schedule III). The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. • The useful lives of certain plant and equipment’s are estimated in the range of 10-20 years. These lives are different from those indicated in Schedule II.

|77| Chap. 7 – Ind AS 16 — Property, Plant & Equipment • Scientific research equipment are depreciated over the estimated useful life of 8 years, which is higher than the life prescribed in Schedule II. • Vehicles are depreciated over the estimated useful life of 5 years, which is lower than the life prescribed in Schedule II. • Information technology hardware are depreciated over the estimated useful life of 4 years prescribed in Schedule II. The useful lives, residual values of each part of an item of property, plant and equipment and the depreciation methods are reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate. Derecognition The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized. Key accounting estimates and judgements The preparation of the Company’s financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company’s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset. 3. ATUL LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Acquisition cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement of Profit and Loss. Fruit bearing plants qualify as bearer plants under Ind AS 16. Expenditure incurred on cultivation of plantations up to the date they become capable of bearing fruit are accumulated under ‘Bearer plant under

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |78| development (Immature)’ and then capitalised as a Bearer plant (Mature) to be amortised | depreciated over their estimated useful life. The plantation destroyed due to calamity, disease or any other reasons whether capitalised as Bearer plant (Mature) or being carried under Bearer plant under development (Immature) are charged off to Statement of Profit and Loss. Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment if they are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one period. Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as ‘Capital work-in-progress’. Depreciation methods, estimated useful lives and residual value Depreciation is provided on the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives. Depreciation is calculated on a pro-rata basis from the date of acquisition | installation till the date the assets are sold or disposed of: Asset category Estimated useful life Buildings 30 years Plant and equipment1 6 to 20 years Vehicles1 6 to 10 years Office equipment and furniture 5 to 10 years Roads 5 years Bearer plants1 40 years 1 The useful lives have been determined based on technical evaluation done by the Management experts which are different from the useful life prescribed in Part C of Schedule II to the Act, in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate. Land accounted under finance lease is amortised on a straight-line basis over the period of lease. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount. Transition to Ind AS On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at April 01, 2015 measured as per IGAAP as the deemed cost of the property, plant and equipment. 4. BAJAJ AUTO LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies i) Property, plant and equipment except land are carried at historical cost of acquisition, construction or manufacturing cost, as the case may be, less accumulated depreciation and amortisation. Freehold land is carried at cost of acquisition.Cost represents all expenses directly attributable to bringing the asset to its working condition capable of operating in the manner intended. ii) Costs incurred to manufacture property, plant and equipment and intangible are reduced from the total expense under the head ‘Expenses, included in above items, capitalised’ in the Statement of Profit and Loss.

|79| Chap. 7 – Ind AS 16 — Property, Plant & Equipment iii) Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. iv) Land and buildings acquired/constructed, not intended to be used in the operations of the Company are categorised as investment property. Transition to Ind AS On Transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2015 measured as per previous GAAP which in case of the Company, corresponds with carrying costs measured in accordance with Ind AS 16 Property, plant and equipment. Depreciation and amortisation methods, estimated useful lives and residual value. (a) Leasehold land Premium on leasehold land is amortised over the period of lease. (b) On other tangible assets i. Depreciation is provided on a pro rata basis on the straight line method to allocate the cost, net of residual value over the estimated useful lives of the assets. Where a significant component (in terms of cost) of an asset has an estimated economic useful life shorter than that of it’s corresponding asset, the component is depreciated over it’s shorter life. Useful life of assets are determined by the Management by internal technical assessments except in case where such assessment suggests a life significantly different from those prescribed by Schedule II- Part ‘C’, the useful life is as assessed and certified by a technical expert. ii. Assets which are depreciated over useful life/residual value different than those indicated by Schedule II are as under: Asset class As per Schedule II Useful life Aircraft 20 years 10 years PDC Dies 8 years 3 years Asset class having residual value at ` 1 Computers and IT Equipment Dies and jigs Electric installations Furniture Office equipment Electric fittings iii. Depreciation on additions is being provided on pro rata basis from the month of such additions. iv. Depreciation on assets sold, discarded or demolished during the year is being provided up to the month in which such assets are sold, discarded or demolished.